KLAR short interest has dropped sharply. Deutsche Bank just lifted its price target by 50%. The borrow market is finally opening up. Three signals are moving in the same direction.
Short interest fell 11.2% in a single day on July 2. It now stands at 7.1% of free float — down from 8.1% a week ago and from a peak above 8.8% in early June.
The month-long decline is now 14.2%. That is a meaningful retreat. Shorts built positions aggressively into the IPO. They are now unwinding them.
Availability has jumped to 50% — roughly one share available for every two currently borrowed. That is still tight by historical standards. But it marks a dramatic loosening from the extremes seen in late May and early June, when availability collapsed to under 5%.
As recently as June 26, availability sat at just 13.4%. The lending pool has nearly quadrupled in size over one week. That loosening is what's enabling shorts to exit — they now have enough supply to close positions without significant friction.
Cost to borrow has eased too. It sits at 2.34%, down from a June 22 high of 3.12%. It remains well above the 1.1% level seen at end-May, but the direction has shifted.
Deutsche Bank raised its price target from $18 to $27 on July 2 — a 50% increase — while maintaining a Buy rating. That is the most aggressive move in recent weeks.
Citizens initiated coverage at Market Perform last Monday. Freedom Broker initiated at Buy with a $25 target the week before. The consensus target now sits at $23.74, well above the current $19.72 close.
The bull case centres on Klarna's improving underwriting, merchant growth of 34% year-on-year, and a US BNPL market projected to hit $116.7 billion this year.
The put-call ratio sits at 0.50 — well below the 20-day average of 0.57. Options traders are positioned more bullishly than at any point in the past month. The PCR hit 0.45 on July 1, the lowest reading in at least two weeks.
The ORTEX short score remains elevated at 73.7, but it has edged lower for four consecutive days from a peak of 74.4. The short-score rank sits in the 3rd percentile — meaning 97% of stocks carry less short pressure. That context matters even as the score dips.
See the live data behind this article on ORTEX.
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